Personally, I believe that it would be insane to bet on CNY. China is a paper dragon. It has huge economic structural problems. At best, it will have a seat at the table when a new global reserve currency is created, e.g., the inclusion of CNY in the use of SDRs. Read post #20 in this thread:
I chose my words badly when I wrote the defacto world currency. I mean the leading World currency, based on which parts of the World are set for growth and their likely future economic alignment.
I agree that China has problems, but their human capital is rising fast. Scientists and engineers bringing skills back to China following Western education. China will give that knowledge a Chinese flavour and catch up in technology, even with a flawed social system.
Maybe there are four possibilities?
- USD remains hegemonic through 2099. I find this unlikely.
- A global reserve currency or SDR approach that underpins currency exchange and international contracts. Maybe less unlikely but I believe that any attempt to agree it de jure would lead to its death by bickering and I can't really see it evolving organically.
- The West will remain USD focused (e.g. trade between Canada in New Zealand being agreed in USD) and trade between say DRC and Indonesia switches from USD to CNY. While much is said about India, Russia, Turkey switching from USD to using their national currencies, the reality is more likely to be the formula switching from USD to CNY.
- A heterogeneous currency environment. Largely underpinned by real world assets, not just "full faith and credit" and "I promise to pay the bearer".
For example, how will the LTC/ETH price be determined, two seconds from now? It won't be set by activity in the LTC/ETH markets. Will it be set by the LTC/USD and ETH/USD markets, or the LTC/USDT and ETH/USDT markets, or the LTC/BTC and ETH/BTC markets? The reality is that LTC/ETH follows all three, to varying degrees.
I'm not saying that will happen, a bi-polar world is likely to gravitate to USD and CNY while non-aligned countries will use both.
asset backed blockchain money simply will not work because you cannot verify the assets any better than today. I say I own xyz tons of gold and derive whatever shitcoin from it, but there is still a huge question of how to prove this fact and even worse such a proof being accepted.
Though PAXG is small (still well under $1 billion market cap) it is effective, as can be seen in its price stability. The advantage of blockchain over the legacy system is not in authenticating the reserves of some commodity or stock. You still need to trust the issuer in both models.
The advantage is in guaranteeing its behaviour further down the custody chain. e.g. naked shorts in the USA and untransparent CDOs in the run up to 2008. Those are problems that blockchain can specifically answer. You can see how Kraken holds your coins, but you can't easily see if your broker loaned your stocks to three people without your knowledge.
US, some allies, OECD think that it's going to continue to be their table. It has been for quite a while and they have become complacent.